In this application we will identify and characterize the growth and differentiation of embryonic progenitor cells of the distal respiratory epithelium during the periods of branching morphogenesis and Type II cytodifferentiation. Maturation of the distal respiratory tract will be studied in vitro, in organ cultures of murine embryonic lung, and in vivo, in transgenic mice bearing human surfactant protein SP-C chimeric genes which direct chloramphenicol acetyl transferase or beta-galactosidase expression. Histochemical, immunocytochemical and in situ hybridization studies will be utilized to characterize the precise sites of expression, state of differentiation and proliferation of the epithelial cells bearing the SP-C chimeric genes. Expression of the SP-C chimeric genes will be correlated with the expression of other endogenous markers of the developing distal respiratory epithelium namely surfactant protein markers SP-A, SP-C, lamellar bodies, and the Clara cell 10kd protein. The role of TGF-beta and EGF in the proliferation and differentiation of the distal epithelial cells will be determined. Specifically, their effects on the timing of appearance and proliferation of the chimeric gene expressing cells will be assessed in organ cultures of the transgenic mouse lungs and correlated with the timing and proliferation of the cells expressing distal respiratory cell markers. These studies seek to determine mechanisms regulating the growth and maturation of the fetal respiratory epithelium critical to perinatal adaptation to air breathing and to the recovery of the respiratory epithelium after injury.